Banks and lenders play an important role in the mortgage process. There are a variety of different ways to finance a mortgage, but I’d like to focus on two specific channels, mortgage brokers versus banks.
Your credit rating is an intrinsic part of getting a mortgage. Most prospective buyers often aren’t aware that in their effort to shop around and get the best deal, they can lessen their chances of even being approved. This is because every time your credit rating is pulled by a bank or a credit union, it is considered a credit application, regardless of whether you end up using that bank or not. Brokers can help to ensure that you gain access to the widest number of deals available. They often have the ability to access deals from a large number of lenders, and can match you to the best lender for your credit situation and needs. Your other option is to seek a loan through a bank directly; this can be an excellent choice for those who have an understanding of mortgages.
Brokers perform a number of tasks, from the moment you first seek them out until you are awarded your mortgage. A mortgage broker is responsible for assessing your situation and your creditworthiness. This will help him or her to develop a better picture of what the lending risk is for lenders. In short, the better your credit, the better the rate you will likely be offered. A mortgage broker saves you time and energy and provides personalized service, sometimes with flexible hours. They offer specialized knowledge and will work hard on your behalf and do all the negotiating for you. They can help you improve your overall rating by advising you which credit cards to use and which to leave idle during the process.
A mortgage broker will review your financial situation and discuss with you your future plans and risk tolerance, and help you choose the right type of mortgage for you. They will tell you the maximum dollar amount you can consider paying for a house for the payments you can afford, and what your weekly, bi-weekly or monthly installments will look like. They can also assist you by creating a strategy so you can pay off your mortgage sooner.
Bank Loan Officers
Bank loan officers typically act in a similar way to brokers, although they work for one specific bank or lender. The loan officers at a bank, credit union or other lending institution are employees who work to sell and process mortgages and other loans originated by their employer. They often have a wide variety of loans types to draw from, but all loans originate from their lending institution. The loan officer will work within banking hours and he/she will take your application and try to find a home loan that suits your needs. Banks lend out their own money, rather than matching you up with outside lenders. Banks and credits unions may also offer bonuses like cash back, reduced fees or point program rewards for bundling your mortgage, credit card and bank accounts. If your personal credit is approved, the officer moves forward to process the purchase.